No will. Biggest names: Prince, Aretha, Amy Winehouse and that is just a few. That means your affairs aren’t in order and your loved ones are not protected. Winehouse left an unwritten song about her finances, but she also left a $6.7 million estate. She had a brother and an ex-husband, but no direction as to who should get what. Without a will, her estate went through the probate process and was distributed to her parents. You need to have a will to name guardians of your minor children and ensure that your assets are distributed, according to your wishes.

Not setting up a trust. Celebs want their glamorous red-carpet photos all over Instagram and Facebook, but that doesn’t mean they want their personal finances to become public record. A will is a public document and a living trust keeps things private. There was more than one tragedy that followed Whitney Houston’s death. Her will named Bobbi Kristina Brown as her sole beneficiary. However, her daughter died three years later. Then her estate was tangled up with an IRS battle over the valuation of recording royalties. The bill from the IRS: $2.2 million in additional taxes. Her ex, Bobby Brown, may yet end up the heir of the Houston estate. That may not be what Whitney wanted.

A living trust keeps your estate private. It designates who is entitled to your assets, and how they are to receive them. It names trustees, and may provide tax benefits.

Not keeping the plan up to date. Life is all about change. Financial conditions, health, family relationships, divorce, marriage, birth, adoptions, estrangements: everything changes. The world-famous author Michael Crichton, author of Jurassic Park and many, many other best-sellers, was diagnosed with throat cancer, when his sixth wife was pregnant. His will was not updated. She had to sue to include the baby as an heir, and a daughter from a prior marriage opposed it. The judge ultimately ruled that the baby should inherit. However, simply updating his will would have taken care of everything, minus the resulting stress, cost and rancor.

Disabled before death. Estate planning is for the living also. You may be disabled and need help in managing your financial affairs. One out of 10 people over age 65 are diagnosed with Alzheimer’s disease, then at age 85, the rate skyrockets to one out of three. One celebrity whose dementia led to a nasty family rift was Etta James, the blues singer best known for the classic “At Last.” She had signed power of attorney over to a son from a prior marriage in 2008. Her husband of more than 40 years said that she was already suffering from dementia and was not competent to sign any legal documents. The son wanted to limit the amount of money the singer’s husband spent on her medical care. They finally settled, and her husband was named as conservator. However, he was given a limit of $350,000 for care for his wife. Etta James passed away shortly thereafter.

Celebrities are not the only ones who make enormous mistakes, when it comes to estate planning. However, they are the ones that we read about.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can help you avoid those costly mistakes.

The article is about a man who looked at all the documents that he and his wife had signed at their estate planning attorney’s office and asked if he could scan and copy the documents onto a flash drive. The attorney agreed. Note that there were no Social Security numbers, no bank account numbers or any sensitive information on the documents. The documents contained only the couple’s names and the names of their heirs.

The man bought a metal flash drive, put a ring loop on it and attached it to his key ring. He scanned and copied the documents onto the flash drive. He did not put a password on the flash drive; some people may feel more comfortable with that.

However, what happened next proved the wisdom of his idea. A few weeks later, he and his wife were enjoying their vacation and his wife needed a visit to the emergency room at the local hospital. While in the admissions office, she was asked if she had a living will and other health care related documents. Her husband had everything with him. They had to locate a computer that was not on the hospital network, due to internal security policies. However, they found one and were able to download the documents from the flash drive.

Remember that not all states recognize documents from all other states, and if you lose your keys on a regular basis, this may not be for you. Having these documents on hand was far better than not.

Everyone, regardless of their age, should have their estate planning documents in order. Things happen, even to young people. Most people leave these documents in a safe deposit box, a filing cabinet or with their attorney. They are secure—but you don’t have ready access to them.

The flash drive is just one way to have these documents with you, while you are away from home. Some offices now offer online portals, where documents can be stored in the cloud. Not everyone is comfortable with that, but it is an option.

Other pieces of information to consider adding to your flash drive: recent medical reports, a list of prescriptions, a list of doctors and any pre-paid funeral arrangements.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include easy access to important documents, when needed.

It is not easy to approach this topic, especially if you have a parent who is not open to discussing the harsh realities of aging. Even if you try your very best to be sensitive, they may still bristle. They may feel like they are too young to be spoken to about these issues or worry that they’ll be considered a burden to your family, or that you simply want to get them out of the way. It’s a tough topic.

Here are some tips for these conversations:

Don’t wait. It’s easier not to have the conversations at all. However, then when an emergency strikes the family is faced with a series of decisions and missing paperwork. Explore options before a crisis. Let your loved ones get comfortable with the concept of talking about these difficult issues.

It’s important to get up to speed with your parent’s health care benefits and their wishes. Do they have the right health care plan in place? Talk with them about the Medicare Advantage plans that are available to help them stay independent longer.

Be sensitive. Let them know clearly that, at some point during their visit, you want to discuss their future. Give that thought time to sink in. You don’t want them to get defensive. Remember that talking about aging and death (or, as we often hear, “end-of-life”) is difficult for everyone. Decide which topics to dig into and which you can leave for another time.

Be prepared and be specific. What topics do you want to cover and what are the most important ones to discuss first?

Long-term care wishes: do they want to try to live at home? If that is not possible, what would they like? Do they have the ability to pay for an in-home caregiver or would they be better off in an assisted living facility? Could they live with any family members?

End of life decisions: is a living will in place? Do they have a durable power of attorney? Have they thought about what they would like, if they are no longer able to communicate their wishes?

Medical coverage: what kind of long-term care insurance do they have and can afford?

Listen. Really listen. Hear what they are saying. Listen to their fears and their wishes. Speak in a loving manner and be patient. Let them know you will do the best you can to honor their wishes.

Take a break. If at first the conversation is halting, and they are visibly uncomfortable, it may not be the right day for them. Or, they aren’t yet able to share their thoughts with you.

Spouses can leave their assets separately and have their own revocable trust. When the first spouse dies, a trust can be established so the surviving spouse has income and even principal. The surviving spouse should not be the only trustee, which would avoid the situation described.

Consider giving children a bequest after the first death. That way, if the surviving spouse needs to use all the funds, at least the biological children will receive something.

Make a joint trust irrevocable upon the first spouse’s death. If spouses sign a joint trust, then draft the trust, so that it becomes irrevocable on the first death.

Give thought to having separate bank and/or investment accounts and name children as beneficiaries, if you want them to inherit your assets. If assets are owned separately, there is a better chance of avoiding a lopsided inheritance or some children being disinherited.

Talk about your funeral plans. Do you want to be buried with your deceased first husband? Where do you want to be buried? Do you want the kids to decide? Avoid a lot of heartbreak by discussing this, as difficult as it may be.

Name a spouse and children as co-attorneys. If everyone works well and plays together, this could give everyone a voice in important decisions. You want to strengthen a family, not fracture it.

Communicate, often. This is not a one-time conversation and should not be swept under the rug.

Check beneficiary designations. These are the forgotten distant cousins of estate planning. People create accounts, name beneficiaries and then often forget about them.

Blended families are always a work in progress and the better you can plan ahead for the death of one of the spouses, the more likely the family will remain a cohesive unit after one parent dies.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include a blended family.

Debt freedom or debt burden? Retirees with no or little debt don’t worry about money, as much as those who have debt. Paying off a mortgage is the biggest burden to retirement. That’s a big amount to cover, when you are not working. If you have big credit card bills and high interest rates, that can make matters worse.

Knowing what you spend. Knowing how bills will be paid in retirement starts with tracking and monitoring how bills are paid before you retire. Having a budgeting system, regardless of how you do it, will give you the information you need to know how much income will be needed each month or each quarter to pay bills. It can be as simple as a notepad or as complex as an accountant-level system, but this knowledge is really powerful.

Both spouses up to speed on money. It’s not enough for one person to know how everything works. Both need to understand their financial status and communicate their concerns and wishes. Eventually, the harsh reality is that one or the other will die, leaving the other to either struggle to catch up or be ready to take the reins.

Multiple sources of income. The most content retirees have saved well and wisely. They have income from a few different sources. You don’t want all your income to come from a tax-deferred retirement plan, because you will be paying taxes on that income. For many, converting an IRA to a Roth makes sense, so that their withdrawals are not taxed. Work with a professional to accomplish this.

It’s not all about money. Having an active social life, pursuing interests, and enjoying day to day activities is key to enjoying retirement. Sometimes that comes about when people move from their single-family home into an active community, where there are full schedules and facilities that promote a variety of interests. An active network, especially one that is purpose driven, elevates the spirit and provides a strong connection to the community.

If you remember Jack Colton, the male lead in 1984’s “Romancing the Stone,” then you know about a guy who spent his whole life dreaming of owning a sailboat, even while he was hiding from a foreign army and getting involved in a crazy criminal treasure hunt. Retirement savers need to find their own inner dream, one they cannot be distracted from and that will keep them focused on saving and investment, no matter what. Imagine your future self-doing what you love doing.

Then there’s “The Bucket List,” with Carter and Edward, who are ready to have an adventure, when their diagnoses are terminal. If you’ve got some thoughts about a bucket list floating around, make them real. Write them down. Then put them in order of priority. Visualize what you’ll need to do to get there. Building your connection with your dreams, will keep you motivated.

An example of keeping your eyes on the prize comes from Netflix, with “Fuller House.” This is a great example of how mapping goals can clinch a retirement strategy. Sitcom dad Danny Tanner gives his San Francisco home to his daughter. He’s not retiring, but he planned for years to live where he wanted, while giving his daughter and her family his home. Know where you want to live in retirement and keep that in sharp focus.

“Everybody Loves Raymond” features Ray and his family and his parents. They live close together, so much so that they are involved in every detail of each other’s lives. Or, for a completely different lifestyle, remember the 2012 comedy “Quartet,” directed by Dustin Hoffman? This was about a retirement community for stage performers, who sought to create a new community among their fellow actors.

Figuring out who you want to spend your retirement years with, can have a major impact on where you will live. Do you want to be close by your family, involved with their daily lives, available for babysitting, family dinners, and the grandchildren’s soccer games? Or would you rather pursue your own interests and enjoy a warm climate?

12/06/2018

There are ways to make both members of the couple knowledgeable about finances.

There can be a high cost to the surviving member of a couple, if the member who passed away was the person who handled all of the household finances, according to The Wall Street Journal in“When One Spouses Handles Finances.”

The cost of not knowing where the money is, how investments are structured, the state of retirement savings, or the daily details of how bills get paid, can be quite high, when one spouse is unexpectedly put in charge.

Spouses are urged to take a more active role in the family’s investments and to be certain they are comfortable with the family’s advisors. If they are both are not comfortable with the professionals handling their money and legal matters, it may be time for a change. If the change is made after a spouse dies, it should be seen as a move towards independence, and not a betrayal of the spouse’s legacy.

Studies conducted by financial service companies have found that despite gains in education and, to some extent, compensation, women still let their spouses handle financial decisions. Even millennial women, those born between 1980-1996 (roughly sixty percent) leave those investment decisions to their husbands.

Women are controlling more wealth and are more likely to divorce or outlive their husbands than at any other time in history, so taking the financial reins is very important.

Financial advisors are trying to bridge the gap. Some encourage spouses to create lesson plans, exploring one topic per session and then go to dinner afterwards (without the kids) to discuss wills, insurance and investment basics or whatever the topic of the week was. Others hold quarterly meetings.

It can be frustrating for one spouse to deal with a non-involved spouse, who either doesn’t want to learn or has trouble grasping some of the concepts. In that case, getting a non-related person involved might be a good tactic. Set up meetings with your estate planning attorney, financial advisor, and CPA that are geared to reviewing your family’s assets and estate plan, with the focus on bringing the non-involved spouse up to speed.

Make it personal and rewarding. It’s far more fun for someone to open their own “50th Wedding Account” and learn by investing, than to get drilled on a textbook lesson. If one spouse dreams of travel, turn working together on budgets and investments with specific trips in mind into a motivating force.

An example in the article is the actor James Gandolfini had a will, but never established a trust. When he died unexpectedly five years ago, his personal finances were an open book and we know that he left $200,000 to his assistant, $500,000 to his nieces and some of his friends were left $50,000, while others were left $200,000. He gave his son his clothing and jewelry, and his wife received the rest of his personal items.

That’s the sort of thing you probably wouldn’t want people to know, especially if you are a famous actor. If you were the recipient of any of those large gifts, and your name was public knowledge, you better believe that your phone will be buzzing with calls from people you haven’t even thought of in years.

Only 60% of Americans have a will. If you’ve got a collection of cars, an amazing wine cellar or a handful of expensive watches and no will, then the state is going to decide who will get what. It won’t matter what you wanted.

If you have minor children and no will, the court selects a guardian. The guardian doesn’t work for free. That money comes from your children’s inheritance. If, like Aretha, you have a special needs child, your inheritance could cause the child to lose any state-funded support, like Medicaid.

Even if you’re not a multi-million-dollar artist, you need a will.

However, that’s just for starters. You also need a power of attorney and a health-care proxy. You may need a revocable trust. You may need a Special Needs Trust. There are many different tools available to protect you, protect your family, and transfer wealth efficiently (read: less taxes) across generations. It takes time to set up, and there are costs associated with having an estate plan created.

Once the plan is created, you have to tidy up the details too, like funding trusts, retitling assets, checking your named beneficiaries and other details.

12/04/2018

Consider your planned y costs to a retirement community, many expenses are included and many other expenses—like paying someone to shovel snow, maintain lawns and gardens, fences and sprinkler systems—are gone. Not to mention the opportunities to meet new people and jump into hobbies and activities.

Myth: Retirement living is for sick people. Nursing homes and rehab centers are folifestyle before retiring, in order to choose the right location.

As retirement approaches, many people need to decide between remaining in their home of many years, downsizing to a smaller location or moving to a retirement community. However, many myths about retirement communities exist as well as truths that need to be researched, according to Next Avenue in “Retirement Living Myths and Must-Know Facts.”

Some truths as well as myths about retirement living:

Myth: No one can afford to live in a retirement community. Well, they wouldn’t be so popular, if that were true. When you total up a mortgage with taxes, utilities, upkeep, and what you may be paying for fitness and hobbies, that one payment would be covered when you move into a retirement community.

While there are monthlr sick people. If you move to a continuing care community, those services will be available to you if and when you need them. However, an active adult community is designed to suit the needs of active, mobile people. There are sports-oriented communities, with golf, tennis, fitness centers, and swimming pools. Others have performing arts spaces, art studios, and classrooms.

Myth: Staying at home is good to retain close ties with your existing friends. Sadly, social networks dissolve, as people move away to live closer to their children, need to go to a nursing facility or die. Those who are left behind are more likely to become isolated and that can lead to depression. Making the transition to an active community leads to more connections and that leads to a better quality of life.

Myth: You’ll never see a young face again. There are always ways to engage with members of different age groups outside of your home. Some communities even have formal mentoring or volunteering programs.

Fact: Travelling is easier, when you live in a “lock it and leave” setting. There’s no worrying about mail, the lawn, or security. Common areas are maintained, and someone keeping an eye on your property.

Fact: You’ll meet many people in their mid-60s. That’s the most common age in active communities. They are social people seeking a carefree and active lifestyle.

Fact: You’re still in charge. Depending on the community, you can keep your car and your beloved pet. You can have the children for overnights. You own your own home, and you own your independence.

12/03/2018

Your family will most likely face some tough times, if you don’t make a plan.

It doesn’t matter which generation you belong to, when it comes to estate planning. If you pass away without an estate plan, it is likely the people you love will face many trying days of tough decisions and trying to straighten out your estate, according to the Chicago Tribune in “Family Finances: Even millennials need an estate plan.”

A will details how you want assets distributed after death. It names an executor to handle those assets. Without a will you are dying “intestate” and the state will decide how to distribute your property and funds. If you aren’t married and don’t have any children, most states will start with your parents. However, if you have a will, the entire process becomes much easier.

There are two documents that are even more important than a will for a single healthy millennial. The first is a Power of Attorney. Through this legal document you appoint the person who is empowered to make decisions about financial matters on your behalf, if you cannot. It’s for when you are incapacitated, by illness or injury, and also if you are unavailable for other reasons, like if you are travelling.

The second document is called an advance medical directive. This defines your end-of-life wishes about medical treatment. The person you name, will be able to carry out decisions like this on your behalf. This is unpleasant, but necessary to address. If you don’t designate a health care agent or fall into a persistent vegetative state, you will probably be kept alive artificially by default. This may not be what you wanted, but if no one has the legal document telling them what you wanted, then this is what happens.

What happens to your digital assets when you die? Facebook now has a default where it memorializes your account, and you can appoint a legacy contact or direct Facebook to delete the account, if that is your preference. Google now lets you choose up to ten trusted contacts, who can download data from your Gmail, photos and more, if you become inactive for a certain period of time. Most states have now enacted laws that govern how an executor can access your digital assets, but you still have to tell the platforms, one at a time, what your wishes are.

Cryptocurrencies, like Bitcoin, are another aspect of millennial life that have to be addressed in advance, if they are not going to disappear completely when you die.

Estate planning documents are governed by state law, so it would probably be a good idea to meet with an estate planning attorney to advise you in creating an estate plan that fits your unique circumstances.